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The EBRD and Kazakhstan – 20 years of partnership

22 May 2013

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As we mark the 20th anniversary of the EBRD’s work in Kazakhstan, we can look back at past achievements, ahead to what comes next, and focus on one of our priorities for the country which we share with the government and society: a greener economy.

In the last 20 years, Kazakhstan has been transformed – to some extent with the help of international organisations such as the European Bank for Reconstruction and Development, but mainly through the hard work and determination of the Kazakh people.

Conditions are not yet ideal for independent businessmen and women: geography, infrastructure and bureaucracy can be a challenge. But we know that the entrepreneurial talent is there from our work with micro, small and medium-sized companies, through cooperation with microcredit institutions such as Arnur Credit or KazMicroFinance, and through our own donor-funded Small Business Support (SBS) unit.

SBS, which has helped over a thousand Kazakh firms modernise, is now supported by grant funds from the Kazakh government– for the first time in any EBRD country.

Kazakhstan is famous for its natural resources, an important source of export revenue. The government is aware that this reliance on resources needs to be lessened. In the country itself, knowledge, education and innovation are all recognised as vital for the future.

The Kazakhs want to introduce the latest technologies and make their economy – currently one of the most energy-intensive in the former Soviet Union – green and efficient.

This is a very ambitious task, and we are under no illusion that it can be achieved overnight. Having invested over €11 billion in sustainable energy projects across our region of operations (over €500 million of which was in Kazakhstan), we know how much effort is needed to make the air cleaner and the economy more competitive.

In Kazakhstan, we are working with the government on raising environmental standards for the industry, and we are convinced that they need to be raised to the level of the European Union.

With that in mind, the EBRD is working with the government to improve the industry’s energy efficiency. Our cooperation covers the much-needed legal and regulatory framework to support best practice in industrial energy efficiency, energy audit regulation, the development of updated energy benchmarks for industry, support for the voluntary adoption of international standards (specifically ISO 50001), and a standards and labelling scheme for efficient industrial equipment.

This will help companies like CAEPCO – one of few private energy operators – invest in the most modern, efficient technology. CAEPCO, where the EBRD is a minority shareholder, has already invested hundreds of millions of dollars in upgrading Soviet-built energy infrastructure. The EBRD is now arranging a new €107 million financing for the company to upgrade electricity and heat services in the cities of Pavlodar and Petropavlovsk.

As a result of this upgrade alone, CO2 emissions will drop by almost half a million tonnes a year – about as much as the whole of Kazakhstan emits in half a day. When the government raises environmental standards, modernisation projects like this one will cut even more energy losses and greenhouse gas emissions.

At our Annual Meeting held recently in Istanbul, we launched a new Sustainable Resource Initiative. The EBRD believes, and has plenty of proof, that having high environmental standards and using resources wisely is not only helping people have better, healthier lives, but is making the economy healthier too. After 20 successful years in Kazakhstan, we remain ready to work as partners with the Kazakh authorities and the private sector, to share our knowledge of sustainable growth and invest in changing lives.

A version of this article originally appeared in Emerging Markets on 20 May 2013.